The government has confirmed that April 2020 will see the introduction of the IR35 reform into the private sector. What effect will this have on contracting?
There are some commentators who believe that if further IR35 changes are introduced which restrict the flexibility of the labour market, then the choice of working as an independent will be under threat. Many individuals will choose to operate outside the rules, while others may simply decide to leave contracting.
The IPSE has long campaigned against the introduction of IR35 into the private sector. In their view, the introduction of the IR35 reform into the private sector may have “a catastrophic impact” on contractors, potentially forcing them out of business.
However, there are others who take a more optimistic view. Whilst they do not support the introduction of the IR35 reform into the private sector, they do believe that employers recognize the importance of independent workers and that they will ensure that they administer the rules accurately.
Qdos, IR35 experts, take this view and say that if engagers take the appropriate steps, they will be able to make well-informed decisions on employment status and allow their contractors to work outside the scope of IR35.
Contractors themselves are also split on the effect the IR35 reform introduction will have. In a recent Qdos survey, 40% of contractors said that they did not believe that contracting would continue to grow, whilst 20% are optimistic that independent working will grow, with 40% being unsure what will happen.
This pessimistic outlook is surely coloured by the fact that the introduction of the IR35 reform into the public sector has not been a success.